Oct. 04--BB&T Corp. will pay $83 million to settle charges that it originated and underwrote federally insured mortgages that failed to meet government requirements.

The second-largest bank by deposits in the greater Lehigh Valley exposed taxpayers to "substantial losses," the U.S. Justice Department said Thursday in a news release.

"While profiting from the [Federal Housing Administration] program, BB&T exposed the taxpayers to losses by failing to comply with [U.S. Department of Housing and Urban Development] guidelines and then took the additional step of falsely certifying that it had complied with such guidelines," said U.S. Attorney John Horn in a statement.

In a news release, BB&T said it cooperated with all agencies involved in the investigation, and that it agreed upon the penalty without admitting any wrongdoing to avoid the cost and uncertainty of potential litigation.

BB&T also said the settlement won't affect its financial results, because of $85 million in reserves it had set aside. The bank also said it is pursuing a "potential recovery" of about $70 million in a "related matter."

In the past year, BB&T has completed a $2.5 billion purchase of Susquehanna Bancshares Inc. and a $1.6 billion purchase of Allentown National Penn Bancshares Inc. With those acquisitions, the North Carolina bank ranks second in deposit market share in the latest Federal Deposit Insurance Corp. summary for the four-county Allentown-Bethlehem-Easton metropolitan statistical area.

With about $2.05 billion in deposits, a 12.4 percent market share and 39 offices, BB&T trails Wells Fargo in the region, according to FDIC.